Arrabawn co-op’s investment programme over the past five years has delivered another positive year for its shareholders, with its 2016 accounts showing a €2.5m increase (from €2.1m) in its operating profit.
The company’s annual results announced this Thursday has reaffirmed the solid position of the co-op, with the strong performance also coming in a year in which milk price, at 27cpl, was competitive.
Key financial figures in the report include that profit before tax was €4.5m, up €3.1m on 2015, while net debt at year end was €12.6m, a €3.2m decrease on 2015.
The positive returns were achieved despite turnover (€199.7m) seeing a 2.7 per cent (€5.4m) reduction on 2015. EBIDTA was at €9.5m, a €3.1m increase on the previous year, while operating margin was up from 1.03% to 2.32%.
On the cost side, fuel and power showed a 17 per cent reduction, with much of that attributable to the first full year of the Nenagh plant having a natural gas connection.
Arrabawn, which has 970 suppliers, is headquartered at Nenagh, and has a dairies head office at its milk processing plant and distribution centre at Kilconnell, County Galway. The company has three divisions: its dairy ingredients operation, liquid milk manufacturing and distribution and its agri-business section, which operates 13 retail stores and a feed manufacturing facility through Greenvale Animal Feeds and Dan O’Connor Feeds, Limerick.
Launching the annual results, Arrabawn CEO Conor Ryan said that the strong 2016 performance was further evidence of the benefits accruing from an investment programme across its operations over recent years.
"Last year reaffirmed the strength of Arrabawn Co-op. We had a more than good performance and this will allow us to continue our capital investment programme going forward, which in turn will ensure the long term success and viability of the organisation. Last year alone we invested €7.2m in capital additions, with the biggest spend on our Nenagh plant. We also invested €1.3m in our Tyone retail operation, which is, as a result, a state-of-the-art flagship store that will not just serve our suppliers and the wider farming community but also the public," he said.
Said Arrabawn chairman Sean Monahan: "In many respects it was a challenging year for the dairy industry but the robust performance of Arrabawn validates the hard work over previous years that has seen us modernise our operations and ensure we are a lean organisation, ready for future growth and actively seeking opportunities for expansion.
"Representing the shareholders, the bulk of whom are suppliers, as Chairman of the board, I was particularly pleased that we managed in a tough year for dairy prices to pay a very competitive milk price of 27cpl. With a diversified business, I have every confidence we will continue to pay a competitive milk price into the future."